9 myths about the Greek crisis

The citizens of Greece face a referendum Sunday that could decide the survival of their elected government and the fate of the country in the eurozone and Europe. Narrowly, they’re voting on whether to accept or reject the terms dictated by their creditors last week. But what's really at stake? The answers aren’t what you’d think.

I have had a close view of the process, both from the U.S. and Athens, after working for the past four years with Yanis Varoufakis, now the Greek finance minister. I've come to realize that there are many myths in circulation about this crisis; here are nine that should be challenged.

1. The referendum is about the euro

As soon as Greek Prime Minister Alexis Tsipras announced the referendum, François Hollande, David Cameron, Matteo Renzi, and the German Deputy Chancellor Sigmar Gabriel told the Greeks that a No vote would amount to Greece leaving the euro. Jean-Claude Juncker, president of the European Commission, went further: he said “No” means leaving the European Union. In fact the Greek government has stated many times that — Yes or No — it is irrevocably committed to the Union and the euro. And legally, according to the treaties, Greece cannot be expelled from either.

2. The IMF has been flexible

IMF Managing Director Christine Lagarde claims that her institution has shown “flexibility” in negotiations with the Greeks. In fact, the IMF has conceded almost nothing over four months: not on taxes, pensions, wages, collective bargaining or the amount of Greece’s debt. Greek chief negotiator Euclid Tsakalatos circulated a briefing on the breakdown that gives details, and concludes: “So what does the Greek government think of the proposed flexibility of the Institutions? It would be a great idea.”

3. The creditors have been generous

German Chancellor Angela Merkel has called the terms offered by the creditors “very generous” to Greece. But in fact the creditors have continued to insist on a crushing austerity program, predicated on a target for a budget surplus that Greece cannot possibly meet, and on the continuation of draconian policies that have already cost the Greeks more than a quarter of their income and plunged the country into depression. Debt restructuring, which is obviously necessary, has also been refused.

4. The European Central Bank has protected Greek financial stability

A central bank is supposed to protect the financial stability of solvent banks. But from early February, the ECB cut off direct financing of Greek banks, instead drip-feeding them expensive liquidity on special “emergency” terms. This promoted a slow run on the banks and paralyzed economic activity. When the negotiations broke down, the ECB capped the assistance, prompting a fast bank run and giving them an excuse to impose capital controls and effectively shut them down.

5. The Greek government is imperiling its American alliance

This is a particular worry of some U.S. conservatives, who see a leftist government in power and assume it is pro-Russian and anti-NATO. It is true that the Greek left has historic complaints against the U.S., notably for CIA support of the military junta that ruled from 1967 to 1974. But in fact, attitudes on the Greek left have changed, thanks partly to experience with the Germans. This government is pro-American and firmly a member of NATO.

6. Alexis Tsipras called the IMF a “criminal” organization

That was, charitably, an overheated headline slapped by Bloomberg onto a very moderate parliamentary speech, which correctly pointed out that the IMF's economic and debt projections for Greece back when austerity was first imposed in 2010 were catastrophically optimistic. In fact, every letter from Tsipras to the creditors has been couched in formal and respectful language.

7. The Greek government is playing games

Because Varoufakis knows the economic field of game theory, lazy pundits have for months opined that he is playing “chicken” or “poker” or some other game. In Heraklion two weeks ago, Varoufakis denied this, as he has done many times: “We’re not bluffing. We’re not even meta-bluffing.” Indeed there are no hidden cards. The Greek red lines — the points of principle on which this government refuses to budge — on labor rights, against cuts in poverty-level pensions and fire-sale privatizations — have been in plain view from day one.

8. A Yes vote will save Europe

Yes would mean more austerity and social destruction, and the government that implements it cannot last long. The one that follows will not be led by Tsipras and Varoufakis — the last leaders, perhaps anywhere in Europe, of an authentic pro-European left. If they fall, the anti-Europeans will come next, possibly including ultra-right elements such as the Greek Nazi party, Golden Dawn. And the anti-European fire will spread, to France, the U.K. and Spain, among other countries.

9. A No vote will destroy Europe

In fact, only the No can save Greece — and by saving Greece, save Europe. A No means that the Greek people will not bend, that their government will not fall, and that the creditors need, finally, to come to terms with the failures of European policy so far. Negotiations can then resume — or more correctly, proper negotiations can then start. This is vital, if Europe is to be saved. If there ever was a moment when the United States should speak for decency and democratic values — as well as our national interest — it is right now.

James K. Galbraith holds the Lloyd M. Bentsen Jr. Chair in Government/Business Relations at the Lyndon B. Johnson School of Public Affairs, the University of Texas at Austin. He has followed the Greek drama in Greece, Brussels, Paris and Berlin since January. His most recent book is “The End of Normal: The Great Crisis and the Future of Growth.”

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trp

It is pretty obviously what economical theory ( dogma ) this author subscribes to – sounds like he was the guru of Varoufakis. The honest assessment is no one really knows how to get control of the situation

Posted on 7/2/15 | 8:07 PM CET

Gert

I have never read a more biased piece, but then again, he has been working with this extremist government, so it is no wonder. Let’s discuss point by point.
1. The referendum is about the Euro: The author is correct that Greece cannot be forced out of the Euro. That was a major mistake indeed, having no mechanism in place to have countries leave the Euro, or be forced to leave when they do not longer obey the rules that were clear from the beginning, when they joined the Euro. But in practice, a ‘No’ vote will leave Greece without any money at all, so they will be forced to at least use IOU’s or any other internal currency, which leaves them de facto out of the Eurozone. It is not about the Euro indeed, but it is about Greece in the Eurozone
2. The IMF has been flexible: The IMF has been as flexible as possible indeed, but of course, if Greece does not agree with the terms, there is no agreement at all. And why should the IMF be more flexible towards Greece, when the IMF is funded partly by much poorer countries?
3. The creditors have been generous: The creditors in general have been very generous. They lent already for hundreds of billions to extremely low intrest rates, knowing fully well that the chance they get is back is very low. The private investors did already have to forfeit on more than 50% of their loans.
4. The European Central Bank has protected Greek financial stability: The ECB has kept the Greek banks alive, even while the Greeks are using it to get all of their deposits out, which is very understandable of course, but it is already money that the ECB will never get back, and where the ECB is already crossing the lines. Furthermore, the Greek government is living off their banks, kept alive by their banks. So also over here, the ECB is crossing its lines.
5. The Greek government is imperiling its American alliance: Putin was the first head of state Tsipras visited. This tells a lot. But indeed, Americans do tend to loan more than Germans, and since America does not need to pay the bill for Greece, but Wall Street will see losses on a Grexit, they show currently more supportive of Greece than Germany, but in the hard facts, it is Germany that is more supportive.
6. Alexis Tsipras called the IMF a “criminal” organization: The author tries to indicate this as an ‘overheated’ reaction. But Syriza has always been speaking differently at home than to the creditors. Varoufakis is known for showing his middle finger to the creditors, and comparable childish behavior.
7 The Greek government is playing games: Even this week, Tsipras has been constantly turning. And they constantly are indicating that the Eurozone will take an agreement, if only they will not agree to the terms, because a Grexit will cost them too much. It is hard to imagine a better sign op playing poker with the lives of millions of people in Greece, when those people indicate they want to remain in the Eurozone.
8. A Yes vote will save Europe: You can’t call communists just ‘authentic pro-European left’, and if the same sentence condemn the far right, without losing all credibility. Syriza could also just do as the people ask when they vote ‘Yes’; if not, it is much more likely the moderate political parties will win again and govern the country. The rest of Europe will see an extremist vote does not bring anything but trouble.
9. A No vote will destroy Europe: This is in fact the same as previous statement. Greece was on the path of recovery with the austerity rules before this extremist government took control. Austerity hurts in short term indeed, but already did help many countries on the path to recovery, including Germany.

Posted on 7/2/15 | 8:28 PM CET

Mark

What an absolute crock

Next he will be “mythbusting” the IMF report which appeared today which actually BLAMED GREECE for being the cause of the need for €50 billion over 3 years, etc.

“2. If the program had been implemented as assumed, no further debt relief would have
been needed under the agreed November 2012 framework. ”

Gee, I wonder what went wrong….

Posted on 7/2/15 | 8:49 PM CET

ironwoker

Accurately brilliant. One in a million voice swimming against the current.

Posted on 7/2/15 | 9:04 PM CET

hari naidu

I know you’ve been in bed with these neo-communists ( why don’t you identify them for what they are?).
Strange as it may sound, I’d some good time with your father (*Affluent Society*) and Myrdal ( I was his research assistant while he issued his *Challenge to Affluence*).
Economics and politics are not always at loggerhead, as they are under Tsipras regime. He doesn’t understand realpolitik of EU culture of compromise and consensus. VJ is not only his (game theory)guru but they will both go down – during this short time – as one’s who destroyed Greek potential recovery & stability.
Now the potential of Grexit is more real than ever, if the NO votes win!

Posted on 7/2/15 | 9:37 PM CET

Anastassios Bougas

Mr Galbraith,
Can you give us just an example of a structural reform realised by Minister Varoufakis during these last six months?
As an economist and Professor do you agree with the measures taken by the government in the Greek educational system?
A. B.

Ingmar von Homeyer

The FAZ just published a piece on the deplorable role of left leaning US professors in the Greece debate (http://www.faz.net/aktuell/wirtschaft/flucht-aus-der-krise-griechen-in-berlin-13678858.html). My point is a slightly different one: The degree to which most of these professors ignore the realities in Greece is indeed astonishing. They appear to have been blinded by their desire to find a real world, high profile case to demonstrate that ‘austerity’ does not work. Unfortunately, Greece is the wrong example. While ‘austerity’ may have contributed to Greece’s problems, it is not the main cause. In the absence of a reasonably efficient and functioning state, neither ‘austerity’ nor Keynesian approaches will work. However, these professors seem to choose to ignore this reality to score cheap points in the domestic debates on ‘austerity’ in the US and UK.

Posted on 7/2/15 | 10:17 PM CET

Yuri

Dear James K. Galbraith,
I’m afraid your “close view of the process” and your “working with Varoufakis in the past” (but ironically, not being an actual insider) has affected your ability to provide proper arguments to uncover the myths you are trying to bust. If this is the same type of quasi-arguments that Varoufakis employs I am not surprised negotiations did not proceed successfully. A disappointing article with a very biased view on current developments.

Posted on 7/2/15 | 11:44 PM CET

APK

Mr. Galbraith, you do yourself no justice writing this piece. I, like many others, prefer objective journalism. This is far anything but.

Posted on 7/3/15 | 12:01 AM CET

JR

@Gert
Ad 1) You are trying to redefine that referendum. It is simply about whether or not accepting that proposal of last week. If yes Tsipras will go and if No Tsipras has a mandate to refuse that proposal.
Ad 2) The IMF is never flexible. It always imposes the “Washington Consensus”. The Troika imposed program resulted in a debt/GDP from 120% in 2008 to more than 170% now. Your definition of “success”?
Ad 3) 90% of that support went directly to French and German banks

Without a haircut which the EU has been refusing from 2008 (it would have busted German and French banks then) Greece would indenture itself for at least one or two generations by accepting the IMF imposed program.

Merkel is not interested in the social impact and doesn’t seem able te get beyond self satified references to “European Values”.

In German parliament:

Posted on 7/3/15 | 12:21 AM CET

LeBelge

Must be easy to have the intellectual dishonesty to call every scholar who doesn’t agree with you biased. Nobel memorial prize winning economists, what do they know anyway…

Posted on 7/3/15 | 1:26 AM CET

Jon Blanche

Why should we listen to a friend of Varoufakis?
Varoufakis said yesterday that Greece doesn’t have a banking crisis and that banks are perfectly capitalized. That’s a plain lie.
Two minutes later he said that the ECB could easily decide to increase ELA funding to re-start the (Greek) banking system after the referendum. If the banks don’t have a liquidity problem, why does he need ELA? Mr. V., your logic doesn’t add up.

Posted on 7/3/15 | 1:49 AM CET

Gert

@LeBelge: Must be easy to use only slogans without arguments. I did not know Mr. Galbraith did hold a Nobel prize. But this article is definitely very biased, and his statements in this article are easily proven wrong. As for US professors actually winning a Nobel prize opposed to austerity, see my answer in points 5 and 9. It is always easier if you don’t actually have to run a country

Posted on 7/3/15 | 6:05 AM CET

nykiddo

Greece must leave the Euro and the European Union. The Greek political body from leftists to nationalists does not have the will and the means to reform government and its institutions. They are bloated, ineffective and corrupt serving the special interests of the elites.
I have lived under such a system for many years in Brazil in the 1980s. First you hope for change but after a while you will either leave the country or become a cynical bystander. In any case you will need to escape the harassment by the bureaucracy and ever increasing taxation. Circumventing regulations, paying bribes and cheating on taxes is a matter of survival as is the expatriation of any savings.
Without a radical realignment of government on all levels any additional rescue funds will simply evaporate and perpetuate the current situation in Greece. As there is no consensus in the Greek political body to reform the current system, chances of meaningful structural reforms are quite low. So whatever side you are on – the austerity or the Keynesian side – it does not matter. Greece is doomed either way.
Greece has no other choice but to go through a purgatory of default. Out of the ashes of this total and devastating collapse might eventually – probably only after a generation – rise a modern Greece compatible with the EU.

Posted on 7/3/15 | 9:14 AM CET

Robert

Did you write this or did Yanis write it for you? There is plenty of blame to go around in this mess and Greece seems incapable of taking any responsibility for past mistakes. Personally I’ll be sad for regular Greeks when the country implodes but hopefully it’ll teach these neo-communists that they have been deluding themselves.

Posted on 7/3/15 | 9:20 AM CET

Fixpir

The author forgot the n°10 myth about the Greek Crisis :
M James K Galbraith understands the Greek crisis and the global economy.

Posted on 7/3/15 | 9:33 AM CET

Luk

What is the use of this piece? It’s so obviously biased that I am skeptical to everything it’s written in. (this is true also for the obviously biased articles in the opposite direction). It does not help me to understand the situation better, it does not help to give me food for thought, it does not make anyone change it mind. This is useless.

And besides, with all the hysterism surrounding the Greek events, this is JUST what we need!

Posted on 7/3/15 | 10:29 AM CET

Ks

One of the most clearly one-sided and biased opinion pieces I’ve read in a while which is deplorable especially because it is presented as a myth-busting piece which it is anything but. The reasons given are clearly biased and based on personal opinion rather than on what is actually happening. ‘an insiders’s view’ ? Really? I think not especially when the author clearly subscribes to Varoufakis’ point of view. I expected better from Politico then these misleading, presented-as-fact opinion pieces.

Posted on 7/3/15 | 12:38 PM CET

LeBelge

Why everything is true;

1. Literally, the question of the referendum is whether the Greek populace wants to accept the proposal as it lies on the table. It’s not about leaving the Euro or the EU. Surely such a strong signal won’t be without effect, and the Greeks are being shared no expense at warnings what might happen if they vote a certain way. But in it’s essence, I don’t see what’s wrong or biased about this statement.

2. The IMF has indeed, not at all been flexible. I don’t understand why anyone would think as much. The IMF method of operation is strong-arming underdevelopped countries that have their ‘economic backs’ to the wall. And in doing this, they are always inflexible. They have been extremely hard on Greece, and are right to do so. Greece holds the largest debt to the IMF in the history of the IMF. They will lose substantiallly in their bargaining position with other countries if they give ground. The root of the problem is that the IMF has no place on the negotiating table, and forms a complicating factor in finding a political solution.

Other than that, they really have not conceded anything at all, policy-wise.

3. All the reforms insisted on by the creditors have been in order to create a budget surplus to pay back the loans. There were certainly no demands for the structural reforms necessary to create growth in Greece, such as the tackling of the corruption.

Because of this lack of economic resilience Greece has collapsed. And it’s populace has suffered enormously, while non-elected officials insist they continue down this path.

To any Greek it must look like this; “We don’t care what you voted for, in the past or now. We’re going to squeeze our money out of you and your society. And when (not if) we do this we’ll give you money, with which you can pay the money our banks gave you back.”

There certainly have been a lot of misstakes on the count of the Greek negotiators. There is no denying that. Now they have their backs to the wall, and are making strange jumps. I don’t think it’s a game, looking at how terribly the Greeks have suffered. European solidarity, democracy and union are placed at risk by uncompromising attitudes and ultimatums, and short-sighted policy making on account of the leaders of the EU, over the last 6 years. Both political and technocratic.

I don’t know what a yes or no vote would mean for the EU. The situation is far too complex. As someone who thinks the EU is a good idea, I would vote no if I were Greek. A democratic answer to the democratic deficit that’s propelling this crisis even further. And with nothing to lose, either way the vote goes, Greece will be in a bad state for the next couple of decades. It’s up to the rest of us to decide what kind of EU we want; one hijacked by neoliberal iedology, unelected officials and lobbyists or one of union and democracy.

Posted on 7/3/15 | 12:42 PM CET

jodocus

@JR

I’m afraid that Gert is exactly right on point (1).

Greece *cannot* remain in the Eurozone if it votes “No”, quite irrespective of its wishes. The fact that there is no legal way for the other Eurozone partners to actively expell it doesn’t mean they have to actively keep it in. They can (and will) simply refuse further loans, in which case Greece has no other option than to issue IOU’s … thereby de facto leaving the Eurozone.

For that reason the referendum really will certainly decide Greece’s continued membership, even if it formally is about accepting or rejecting the lenders’ conditions.

Posted on 7/3/15 | 1:18 PM CET

Michael

@Gert Excellent summary. Galbraith & Varoufakis are not only drowning the greek economy but also endanger the european spirit.

Posted on 7/3/15 | 2:53 PM CET

LeBelge

^ If they vote no, the faith of Greece will be completely in the hands of the creditors. Question is what the creditors will do with Greece in that situation. There are many downsides to a grexit, and the statements are going in all directions. Personally, I think, or hope, there would still be an off chance for a deal.

Even then, it’s all very ambiguous. There is just no framework for it. Greece could in fact still legally print euro’s; so what’s to stop them from printing 240 billion € and handing it over? (Apart from the fact that this would be insane, it just shows the huge legislative hole the EU would be in)

Posted on 7/3/15 | 3:00 PM CET

LeBelge

@Michael
Apart from the fact that Galbraith isn’t even European, nor in politics & Varoufakis has only been in power for half a year, whereas this crisis has been going for 7 years. How can you blame 2 people for huge systemic failures and short-sighted policy making on the highest level.

Posted on 7/3/15 | 3:06 PM CET

LeBelge

@trp
An economic theory is more than observing that the austerity measures have been draconic, or that Greece will not know substantial growth for the next 20 years in order to maintain a very high budget surplus.

An economic theory could for example be a theory including privatization, fiscal austerity, deregulation, free trade, collectivising losses, privatizing profits and reductions in government spending.

Posted on 7/3/15 | 3:13 PM CET

hendrik

Bias, bias, bias. No evidence, only claims and a lot of missing refutation. Sorry but this piece is harmfully bad. e.g. “5. The Greek government is imperiling its American alliance

This is a particular worry of some U.S. conservatives, who see a leftist government in power and assume it is pro-Russian and anti-NATO. It is true that the Greek left has historic complaints against the U.S., notably for CIA support of the military junta that ruled from 1967 to 1974. But in fact, attitudes on the Greek left have changed, thanks partly to experience with the Germans. This government is pro-American and firmly a member of NATO.” > It says nothing about the talks between Putin and Tsipras.

Posted on 7/3/15 | 3:24 PM CET

wolf

wolf

PATHETIC

Posted on 7/3/15 | 6:26 PM CET

Gert

@JR
1) Speaking about redefining the referendum, the question asked in the referendum does not even make sense. It was not the final offer, and it is not valid anymore. I’m talking about the real consequences of the result, so that is much more important. And btw, even Syriza is ‘redefining’ the referendum, by stating that they will resign at a ‘yes’ vote (so they are already indicating they are not democratic enough to do as the people ask them to do), or by stating that with a ‘no’ vote they would be stronger in further negotiations, even though it is very likely there will be no more negotiations, and ignoring the democracies in other countries.
2) The IMF was already very flexible by allowing Greece those loans when they badly needed them in the first place, but of course they need to insist on structural reforms, in order to get a country back on the path to growth, as Greece was when this extremist government took control and ruined it all. Remember that they are funded by many countries, some of them much poorer than Greece.
3) I don’t know where you did get this number of 90%, but it is indeed true that some of the debts Greece had with private investors, including banks, pension funds, etc., were taken up by governments in order to avoid a complete collapse, which would have been a disaster for all people in Europe, especially retired people. But even then, those private investors lost more than half of what Greece owed them. You can say it was reckless for those private investors to do this, but if they would not have done this, Greece would have been bankrupt long time ago.

Posted on 7/3/15 | 10:04 PM CET

The Economist

Greece has been awash with cheap credits for private and public consumption for the better of a decade, then has been flooded with 240 bn euros of cheap rescue loans… Yet it is never the fault of the Greeks obviously. Mr Galbraith’s arguments readily turn facts into unfacts, falsehoods into vérités, like the Newspeak described by George Orwell.

Posted on 7/3/15 | 10:47 PM CET

Gert

@LeBelge: Already much more arguments, and more balanced view. That’s positive, and the way I like to debate. But you write that it’s all true, while for most points not answering on my arguments why it is not true at all.
1) As I did answer to JR, the literal question in this referendum does not make sense at all, since this was not the final proposal, and it is not valid anymore. But in practice, it is about leaving the Euro or not, and in meanwhile, Syriza itself also made it into a referendum for them to remain in the government or not.
2) As I wrote to JR as well, they have already been very flexible in allowing the loans in the first place, when really needed. But I’m glad you also indicate they should not be flexible. Concerning the critic on austerity, it is hard in short term indeed, but in long term did already help a lot of countries, including Germany.
3) Of course the idea of the reforms is to generate a primary surplus, otherwise it would be a bottomless pit, and nobody does get better by it. You do write about the money ‘our banks gave you’, but that is incorrect. The banks did not give money to Greece, but just lent it, as probably your bank did for your mortgage. So, obviously it needs to be paid back. In meanwhile, the private investors as banks and pension funds did already lose more than half of it by a so-called ‘voluntary’ haircut (almost as voluntary as when being robbed with a gun to your head).
4. The ECB has been providing the so-called ‘ELA’ (Emergency Liquidity Assistance), and even constantly increasing it, to keep the Greek banks afloat, so you can’t claim that the ECB cut them off. But indeed, as Syriza did not follow the agreements that were made, and even did roll back some of the reforms already made, the agreement was in fact terminated by Syriza. I think the ECB already crossed multiple lines, in favor of Greece.
7. It is not because Varoufakis tells he is not playing games that he isn’t; that’s part of this ‘game’. But the facts are that in what he is saying and doing, it does show all signs of a poker game, gambling away the future of the Greek people and their membership to the Eurozone, which the Greek population indicate they want to keep. And the twists and turns of Syriza the last weeks are making you almost dizzy.
I do also believe strongly in the European Union, as I think it does give us much more power in a globalized world, which individual countries would not have, and it also gave us much peace and stability in Europe. I also believe in the Euro, as it did give us (and also the Greek people) much prosperity, but in order to keep it possible, the Maastricht rules as agreed by all countries who joined it must be kept. Giving in to the Greek demands, would completely destroy it very soon. So the only option is to vote ‘Yes’, even to this ridiculous and unconstitutional referendum, as a mockery of democracy.
Finally, as ‘liberal’ means ‘free’, the words ‘hijacked by neoliberals’ are a ‘contradictio in terminis’ You seem to use the word neoliberal as an insult; I consider it as something to be valued, in contrast to extremist and totalitarian ideologies as fascism and communism. And don’t forget that the leaders of the other countries of the Eurozone are also elected by their democracies, and the ‘unelected officials’ are appointed by those elected leaders as specialists, in order to enforce the laws and agreements by those leaders.

Posted on 7/3/15 | 10:48 PM CET

LeBelge

@Gert

I was building up argumentation for the article & why it’s not biased, not necessarily for your points.

As for that:

1. The author simply states that the referendum itself is not about leaving the euro. I suspect in order to clarify this towards Americans to whom it might appear as if the Greeks are voting blak on white on whether they want to leave the euro. However flawed the question of the referendum is stated or the undeniable consequences of it on Greece and the Euro, saying the question of the referendum is not leaving the Euro but a yes or no to a proposed bailout is simply fact.

2. The mistake you and JR are making is a systemic one. First things first, subsequent Greek governments with the help Goldmann Sachs hid their huge debt in order to get into the Euro. This is fact. And obvious bad governing.
What happened when the financial crisis hit in 2009, is that private credtors of Greece (who wrecklessly and continuously lent to the Greek governments) were given a get out of jail free card, and the debt was moved from the private sector on to European taxpayers. And as we can see now, pitting them against each other. A terrible misstake which has propelled the Greek crisis all the way to this referendum, & in fact illegal by the Maastricht treaty. So the fact that the IMF and other institutions took over these loans isn’t a pinnacle of solidarity, it is an economic, moral and lagislative misstake.

And the author simply states that the IMF has not been flexible about the policies induced by the institutions, which is again simply fact. Nobody here is even denying this.

4. In my last post i added a link, in which it is explained how Greece was cut from normal ECB funding and put on ELA in the first few weeks Syriza took office. This was in order to put pressure on the Greek negotiating effort.

7. I think someone really playing a poker game would seem more on top of his game. I can’t believe all the misstakes of the Greek government in the negotiations are part of a cold blooded negotiating tactic. But then again who knows. I take him at his word, because the reason he is in power is because the Greeks have been abused and deeply empoverished by the bailout program, and the terrible effects and prospects of a Grexit barely seem worse than another decade of austerity measures. For this last reason Syriza is in office, not because Greece suddenly wants to turn communist.

It’s great that were both pro European and pro Euro, that means there will allways be ground to compromise and discuss things. Just saying, read the Maastricht rules, and you will read a rule about how it is forbidden for governments of the EuroZone to bail each other out. That is the real crime, that European tax payers are paying for the misstakes of the financial sectors. And putting an end to ridicoulous, gutt-wrenching austerity, and the demonization of European people, is a far more noble and pressing matter than teaching the Greeks a lesson or two.

The great drama with the ‘unelected officials’ is that in the case of the Eurogroup, the ministers don’t have to pay any heed to the needs of the Greek populace. Sure they are elected by the Dutch, the Germans or the Spanish.

And as for austerity, well that’s just a whole other shipwreck.

Posted on 7/4/15 | 3:47 PM CET

John

We see the tree and we miss the forest. Let’s offer a sustainable debt to Greece so we can have the right to demand strict reforms that lead to growth. If we keep cheating by pretending to give tons of bailout money just to recycle them between the same hands (banks/creditors), then the Greeks will start cheating again on their governing system which ironically EU supports since until now was always saying yes to everything that ECB and IMF wanted to impose as an experiment. Enough with this madness. Let’s get along all together ..for a change.

Posted on 7/4/15 | 4:28 PM CET

FL777

It’s really pretty simple. If you vote for any democrat anywhere for any reason you are voting to make America look just like Greece